Rising health care costs take a toll

News-Times, The (Danbury, CT)

Published 7:00 pm, Sunday, November 18, 2007

In the past five years, according to the nonprofit Kaiser Family Foundation, health insurance premiums in the United State have grown 78 percent. In the same period, inflation grew by 17 percent and average wages grew 19 percent.

The pace of growth in health insurance premiums is forcing companies that offer health insurance to employees to keep costs down in any number of ways. Typical measures include higher deductibles and cuts in benefits, but experts say companies are increasingly looking outside the box in an attempt to reduce costs.

One new cost-cutting measure is to get employees who have spouses with health insurance available to them through their own full-time jobs to have the spouse enroll in that employer's plan, rather than be covered by their husband's or wife's insurance.

"It's by no means the norm, but we're seeing more companies trying to set up an incentive to take dependents who have health care coverage through their own employment and push them off the company's plan," said Tom Billet, a Stamford-based senior consultant for Watson Wyatt Worldwide, a firm that helps businesses manage employee benefits programs.

The incentive might mean lower costs, but increasingly companies penalize employees who have spouses on their health plans. Some companies, for instance, has introduced a "spousal surcharge" of $150 on top of an employee's health plan premium to enroll a husband or wife, if the spouse has health insurance available through his or her own full-time job.

How many companies are turning to spousal surcharges as a way to keep health care costs down on a national scale, however, is unknown.

Gary Claxton, a vice president at the Kaiser Family Foundation, said the foundation's most recent Employer Health Benefits Survey, which questioned more than 3,000 randomly selected public and private employers across the country, found 10 percent of small employers questioned -- those with 199 of fewer employees -- said they offered financial incentives for employees to move to their spouse's health insurance plan. For employers with 200 employees or more, the figure jumped to 15 percent.

Though no data is available about how many employers charge workers additional premium amounts to enroll spouses who have coverage available through their own jobs, Claxton noted that in another foundation survey 12 percent of employers said "that they vary the (company's) contribution for family coverage if the family member has another coverage option. ...

"It's not a new thing that employers would rather not be the ones the whole family goes to if they have more options," Claxton said.

And Billet pointed out that a married couple would often be better off splitting coverage between two companies, but said that isn't the case all the time.

"In many, if not most, cases, depending on the level of coverage and what the contributions are, between the two companies it's going to be a better deal to get the coverage under (a spouse's) own plan," he said.